Eduardo Romero Sanchez thought he had one last chance to save his house. He paid a man $1,800 after he heard a radio ad saying he could modify his mortgage to eliminate soaring monthly payments.

The mortgage rescue never happened. Sanchez lost his four-bedroom Bloomington home to foreclosure in 2011. After nine years as a homeowner, he was a renter once again.

“It was very sad, especially given everything that I lost along the way,” Sanchez said an interview in Spanish. “The only solace I had was knowing that I wasn’t the only person who was taken advantage of.”

Sanchez’s plight reflects how thousands of Latinos and other minorities are faring in Minnesota’s housing market. Despite the economic recovery, 38 percent of minorities owned a home in Minnesota in 2011, compared to 77.5 percent of whites, according to census data analyzed by the Amherst H. Wilder Foundation. Census figures show Minnesota’s gap in homeownership between whites and communities of color is the worst in the 50 states.

State anti-discrimination officials and civil rights advocates say the drop in homeownership among minorities is the consequence of bad lending practices during the housing boom that made them especially vulnerable to foreclosure. Many of those practices have been outlawed, but minority homeownership hasn’t bounced back because many of those affected have also lost jobs or fallen victim to mortgage modification schemes.

University of Minnesota researchers have also singled out racial discrimination. Two years ago they recommended that “financial institutions, local governments and decisionmakers should be held accountable for enforcing anti-discrimination policies in lending and foreclosure practices.”

Several major banks strongly deny that they discriminate against minority borrowers. Teri Charest, a spokeswoman for Minneapolis-based U.S. Bank, said the company judges borrowers solely “and consistently on financial criteria and not on race.”

“We wonder when this state is going to wake up and say that all of its citizens are part of this community that we call the state of Minnesota,” Gray said.

Highest gap in country

The homeownership disparity in Minnesota has historically been wider than the national average. In 1990, that gap was 35 percent, compared to a national average of 24.5 percent.

For households of color, homeownership in Minnesota peaked in 2008 at 46.5 percent, according to census data. But after the housing market crashed that year, the gap grew at a rapid pace in Minnesota, while the national disparity stayed steady.

Between 2009 and 2011, U.S.-born blacks in Minnesota had a 26 percent homeownership rate, the lowest for at least 20 years. Hispanic homeownership was 43.5 percent.

Craig Helmstetter, senior research manager at the Wilder Foundation, said research by his organization and others has shown that Minnesota’s communities of color were more likely to get a subprime loan, which led to higher foreclosure rates when the housing market crashed. That has now made it more difficult for minorities to recover, he said.

The University of Minnesota’s Institute on Race and Poverty used Home Mortgage Disclosure Act data from 2004 to 2006 to conclude that even higher-income minorities were denied loans at a higher rate than whites with lower incomes. The 2009 study says “the denial rate for blacks with incomes above $157,000 was 25 percent, while it was just 11 percent for whites making less than $39,250.”

“The numbers are astounding,” Gray said.

In 2012, Wells Fargo paid at least $175 million to settle federal allegations that it discriminated against black and Hispanic borrowers. The Twin Cities was not one of the eight metro areas examined by the Justice Department.

Wells Fargo, the largest home mortgage lender in Minnesota, does not “tolerate discrimination against, or unfair treatment of, any consumer,” said bank spokeswoman Peggy Gunn.

“Our loan decisions are based on credit and transaction risk. Race is not a factor. We are committed to serving all customers responsibly and fairly, and we know that our continued growth depends on that,” she said.

Recession plays bigger role

Luke Grundman, an attorney for Mid-Minnesota Legal Aid, said the first wave of foreclosures among minority homeowners was the result of so many subprime loans.

“Now we are in the midst of the second stage: poor mitigation efforts and ethnically-targeted foreclosure scams,” Grundman said.

Sanchez, Grundman’s former client, said he was desperate to keep his home, which is why he turned to someone who promised help. But paying $1,800 upfront did not sit well with Sanchez.

“I didn’t understand why he would need that money,” Sanchez said. “I later went to an agent I trusted and she said, ‘What have you gotten yourself into?’ That’s when I found out someone who was really going to help me with a loan modification or a short sale would not be asking me for any money. ”

With Grundman’s help, Sanchez got his $1,800 back, but still lost his house.

Sanchez said he often thinks the Latino community in Minneapolis is taken advantage by people of their own background.

“I’m from Mexico. This man was from Mexico,” he said. “These people often see the vulnerability in the community and they take advantage of that.”

When Bernicia Flores and her husband Carmelo purchased their home on 4th Avenue S. in Minneapolis in 2005, they were paying $1,900 a month for their mortgage. Then they found out that they had to pay thousands of dollars to replace the roof and windows, costs that they hadn’t expected.

She tried to refinance but was denied several times. When the foreclosure notice arrived, she paid more than $500 to two people who promised to help her keep the house. Neither came through.

The bank foreclosed on her home in December.

“It was devastating for my daughters,” Flores said in Spanish. “They cried so much. It was worth so much to us, but the more money we put it into it, the more we lost.”

Other disparities play key role

Unemployment or loss of income can lead families to fall behind on mortgage payments and then fall for other scams that promise to get them back on their feet.

In 2012, the Economic Policy Institute reported that the black unemployment rate in the Minneapolis metro was 3.3 times that for whites, the biggest black-white unemployment disparity in the nation.

Jewel Tracy, who’s black, lost her job with Kelly Services in February 2010 and began falling behind on the payments on her home on Clinton Avenue S. in Minneapolis.

“I was going to start receiving Social Security in nine months,” said 65-year-old Tracy. “But in between that time, I just couldn’t find work.”

After nearly 20 years as a homeowner, Tracy moved out in October 2011.

In November 2012, she moved into Ebenezer, an apartment complex for senior citizens in Minneapolis. Tracy doubts she will ever be a homeowner in Minnesota again.

“It’s like a death,” Tracy said. “There is a mourning period — it’s a very dark period. Just today I called my friend and told her I feel like I’m two seconds away from crying.”

With a foreclosure on her credit record, Flores has also given up on the idea of owning a home. She now lives in an apartment in north Minneapolis with her two daughters, five nephews and nieces, sister-in-law, mother and husband.

“My niece says, ‘We live crammed like cockroaches, but at least we are happy,’ ” Flores said. “She’s right. At least we are together.”